Ecuador accuses US of 'blackmail' as oil dispute worsens

QUITO (AFP) - Ecuador accused the United States of "blackmail" after Washington abruptly suspended free-trade talks with the South American nation in the wake of its cancellation of a US oil company's exploration rights.

The suspension of the free-trade talks came after Quito told Occidental Petroleum Monday that it was canceling the US firm's rights to an oil field in the Amazon basin region and taking control of its production infrastructure.

"This is a sanction, unacceptable blackmail," Ecuador's interior minister, Felipe de la Vega, told the Uno television channel on Wednesday.

"We are a sovereign nation and if gentlemen want to halt the free-trade talks, which is sad, then we will look to Europe," he said.

De la Vega spoke as the dispute between the two countries over oil and trade appeared to worsen, as have relations between the administration of US President George W. Bush and Venezuela and Bolivia, two other key South American energy producers.